What does it mean by pressures for cost reduction while managing an international business? And how can it be achieved?
The need to lower unit costs across all markets to remain price-competitive - often achieved through economies of scale, off-shoring, or global standardisation
What drives the pressures of cost reduction?
Price based competition - especially in emerging or mass markets
Economies of scale and standardised production
Investor pressure - shareholders push for profit maximisation and margin improvement
Digital technology
What are the advantages of an international business having a cost reduction focus?
Higher profit margins
Low-cost competitive advantage
Supports mass market strategies
Increase in productivity and efficiency
What are the disadvantages of an international business having a focus on cost reduction?
May result in less relevant products for local markets
Can cause brand damage if percieved as too generic
